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Frequently asked questions about directors and officers insurance

Directors and Officers insurance (D&O insurance) is one of the most common types of business insurance policies in New Zealand. We’ve compiled a list of the most frequently asked questions regarding D&O insurance to provide useful information to current and prospective policyholders.

What are Directors and Officers Insurance Requirements and Coverages?

Directors and Officers insurance offers protection to the leaders of a company against the potential legal fallout from their decisions. 

What are the Key Coverages of Directors and Officers Insurance?

Directors and Officers insurance can cover defence costs and damages (awards and settlements) arising out of wrongful act allegations and lawsuits brought against an organisation’s board of directors and/or officers. These could stem from decisions and actions taken within the scope of their regular duties.

Does Director and Officers Insurance Protect Against Shareholder Actions?

Yes. If shareholders believe a decision made by a director or officer has negatively impacted the value of their shares, they can file a lawsuit. D&O insurance can help cover the costs associated with such legal action.

Are Regulatory Investigations Covered?

Absolutely. D&O insurance also covers the legal costs arising from governmental and regulatory investigations. In the event that a director or officer is investigated over potential wrongdoings in the course of their duties, the policy can provide coverage.

What is Unique About Directors and Officers Insurance in New Zealand?

While D&O insurance has global applicability, there are certain unique aspects to consider in New Zealand.

New Zealand’s legal system can hold directors and officers personally liable for the decisions they make on behalf of the company. Therefore, having adequate D&O insurance in NZ can offer crucial financial protection.

Does Every Business in NZ Need Directors and Officers Insurance?

While not every business in New Zealand is legally required to have D&O insurance, it is strongly recommended for all businesses with directors or officers who make decisions that could potentially lead to legal action.

Is Directors and Officers Insurance Expensive in New Zealand?

The cost of D&O insurance in NZ typically varies from $50 to $100 per month however can vary significantly depending on the size of your business, the industry you operate in, and the specific risks associated with your operations. 

How Do You Buy Directors and Officers Insurance with Gerrards?

Purchasing D&O insurance through Gerrards is a straightforward process.

How Long Does it Take to Buy Directors and Officers Insurance Through Gerrards?

We can get multiple quotes from top insurers in 24 hours or less. We can also advise you about coverage limits and the best fit for your business. Once a policy is selected, we can quickly send a certificate of insurance.

What is a Directors and Officers Insurance Certificate?

A D&O insurance certificate is a document that provides proof of your insurance coverage. It details the terms and conditions of your policy, including the policy number, coverage limits, and the policy period.

What Industries Does Gerrards Cover?

Gerrards is equipped to offer D&O insurance coverage for any industry. Whether you operate in healthcare, education, technology, or anything else, we can help.

How Much Directors and Officers Insurance Do I Need?

The amount of D&O insurance you need depends on various factors like the size of your business and the nature of your industry. At Gerrards, we’re more than happy to help you determine the right amount of coverage for your business.

Directors and officers insurance claims

How Do I Make a Directors and Officers Insurance Claim?

Making a claim is simple. Contact us, and we’ll handle communication with the insurance company on your behalf. We’ll advocate for you, ensuring your claim is handled promptly and fairly.

What are Some Common Directors and Officers Claims?

Imagine a software company, XYZ Corp. The directors made public statements promising an innovative product launch, projecting significant revenue growth. Shareholders were excited and invested more. But the product didn’t launch due to unforeseen technical issues, leading to a drastic drop in the share price. The directors were accused of misrepresenting the company’s potential, causing financial harm to shareholders. A group of shareholders filed a lawsuit against the board, leading to a D&O claim.

Let’s take the case of ABC Manufacturing. One of its directors was also a substantial shareholder in a supplier company. He consistently advocated buying raw materials from this supplier despite cheaper alternatives, leading to higher production costs. When this was discovered, other shareholders accused him of a breach of fidicuary duty – he had prioritised personal gain over the company’s interest. This resulted in a D&O claim.

Consider DEF Retail. They had to lay off several employees due to financial hardship. One of the laid-off employees felt she was selected because of her age and filed a lawsuit against the company’s directors and officers for age discrimination. This led to a D&O claim, as the directors and officers were held responsible for the decision.

GHI Pharma was under scrutiny for violation of environmental regulations in its waste disposal. Despite multiple warnings, the company’s directors failed to address the issue. When the environmental agency levied hefty fines and sanctions on GHI Pharma, investors filed a lawsuit against the directors for failing to adhere to regulations and causing financial loss. This situation triggered a D&O claim.

Is Directors and Officers Insurance Worth It?

Determining whether D&O insurance is worth it depends on several factors.


  • Protection against personal liability: This can safeguard personal assets.
  • Defense costs: D&O insurance can cover the potentially high cost of legal defense.


  • Not all acts are covered: Illegal or fraudulent acts, for instance, are generally excluded from coverage.
  • Cost: For small businesses, the cost of premiums might be a concern.

Directors & Officers Policy Changes

What Happens If I Need to Change My Insurance Later?

If you need to change your policy, contact us. We can guide you through the process of updating your coverage to better fit your business’s evolving needs.

What Happens If I Cancel My Directors and Officers Policy?

Cancelling your D&O insurance leaves your business exposed to risks, as directors and officers could face personal liability for decisions made during their term.

How Does D&O Insurance Compare with Other Policies?

While D&O insurance covers claims related to the decisions and actions of company leaders, public liability insurance covers claims for bodily injury or property damage that occur as a result of your business operations.

Professional indemnity insurance protects against claims arising from professional negligence or inadequate services. D&O insurance, on the other hand, protects directors and officers from the legal consequences of their decisions.

Directors and Officers insurance and D&O insurance are the same things. D&O is simply an abbreviation of Directors and Officers.

Do you have further questions about directors and officers insurance NZ?

We hope this guide has shed light on the intricacies of directors and officers insurance in New Zealand. However, we understand that every business is unique, and you might still have questions specific to your situation. At Gerrards Insurance Brokers, we’re here to help. If you have any further queries about directors and officers insurance, or any other insurance need, please don’t hesitate to contact us. Our team of experienced professionals is always ready to provide personalised advice and solutions tailored to your business. 

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